5 Keys to Money Confidence

Money confidence is a hot topic. Last week’s blog focused on the “what” of money confidence. This week we’re going to break it down some more.

One of the great things about money is what it can do for you. In a perfect world, money enables you to take care of your family, meet your life’s goals, fulfill your dreams, and maybe even provide a foundation for the dreams of future generations. Money confidence means that all the pieces are in place — your wealth is being managed intentionally, confidently, and with clear goals and strategies.

So what does this wealth management for money confidence look like? Let’s start from the beginning and look at the basic components. In the coming weeks we’ll offer more information on how to get there.

The components of wealth management for money confidence look like this:

Human Capital — This is all about you and your potential to earn. It’s also about your happiness. Human capital is your knowledge, creativity, skills, health, and value. Applied to wealth creation, human capital involves income maximization, and ways to get there, like effective salary negotiation, professional development, networking, and career strategies.

Investing — Ideally, investing leads to wealth creation and preservation for you and your family. Investing successfully means having sufficient savings for retirement, money for education and other family goals, and financial support for later generations. Investment strategies can include financial instruments like stocks and bonds, as well as real estate and other valuable assets.

Financial Planning — This is your money road map. You start big — articulating life goals and values — and then go to the next level of determining strategies to provide the financial pieces of the puzzle. Those strategies get broken down even further, into day-to-day financial behaviors like budgeting, saving, and debt management.

Risk Management — Confidence comes from having a plan, but it also comes from knowing there are protections in place. Managing risk is all about having the right insurance, careful tax planning, investing for different life phases and priorities, and having savings and other financial cushions in place for unexpected financial and family difficulties.

Family Goals — While these goals are wrapped up in some of the other components, they also need to be considered separately because of their importance, their value, and their cost. We frequently mold our lives around our family priorities, and use them both as a guide, and a response. These goals involve childcare, eldercare, education, legacy planning, and philanthropy.

Money is power, as we all know. Money confidence is the power to manage your money comfortably and confidently, meeting all of the priorities of your life and your family.